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Yes you always need an external hard drive! iCloud/iTunes Match does NOT back up your uploaded music you've imported into iTunes (CDs...). It only backs up iTunes music that's available in the iTunes store available in your country. Be advised, your "purchased" iTunes music is NOT yours to own, but yours to manage. Back it up so you can always import it again in the future if that music has been deleted from the iTunes store. Happens too frequently. I found this out the hard way. I say have a plan, then have a back up plan.